‘Tough deal’ for Sunderland in Spending Review

Chancellor George Osborne speaking in the House of Commons in London about his final spending plans before the country goes to the polls in 2015.
Chancellor George Osborne speaking in the House of Commons in London about his final spending plans before the country goes to the polls in 2015.
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NORTH EAST civic leaders have reacted with dismay to George Osborne’s failure to hand the region greater control over its economic destiny.

The NEvolution campaign has been urging the Chancellor to enact the recommendations contained in Lord Heseltine’s report ‘No Stone Unturned’, which called for the UK’s regions to be given great control over areas such as infrastructure and economic strategy.

But yesterday’s Spending Review made no mention of the regions, beyond the creation of a £2billion fund from which Local Enterprise Partnerships (LEPs) will bid for cash.

Sunderland City Council leader Coun Paul Watson is also chairman of the Association of North East Councils.

“Today’s Spending Review is as most of us expected – a tough settlement for local government, the region and the country. We’re looking forward to seeing the detail when it emerges around infrastructure investment, particularly in relation to transport,” he said.

“The creation of a single capital pot of £2billion from 2015 that our LEPs will be able to access will help the North East grow its local economies, but it is disappointing today’s announcement said so little about the recommendations in Lord Heseltine’s report, which would help the North East.”

The council said it would have to study the announcement to see what effect the review would have on Wearside.

“We’ve already had to make £100million savings in the last three years and we’re facing another £100million over the next three, so there’s no doubt that a further 10 per cent cut in local government funding is going to hit the city hard,” said Coun Watson.

“Local government has seen a 33 per cent cut in funding from Central Government at a time of rising demand and costs in areas like social care. The effect of these continued reductions, and the additional impact of welfare cuts means areas such as the North East have been hit harder than affluent areas in the south.

“We’ve worked very hard to protect front line services by transforming the way we do things at the same time as improving services where possible but we’ve had to make some hard choices and there will be even more difficult decisions to be made as our resources continue to diminish.”

North East Chamber of Commerce Director of Policy Ross Smith said it would be clearer exactly what the Spending Review meant for the region after today’s briefing by Chief Secretary to the treasury Danny Alexander: “The significant increase in capital spending and infrastructure will be welcomed and will hopefully see some of the major infrastructure projects already promised by the Chancellor, such as creating an uninterrupted motorway link from London to Tyneside, come to fruition,” he said.

“Establishing a single pot of funding for Local Enterprise Partnerships is also good news, although significantly less than what was proposed in Lord Heseltine’s growth report.

“However, the real question is how much will the North East benefit from the Spending Review and we will not find this out until Danny Alexander announces where the £100billion capital investment will be targeted.”

Union leaders condemned the latest round of public spending cuts.

TUC Northern Regional Secretary Beth Farhat said: “Lord Heseltine had a plan that most of the North East region broadly supported to devolve £49billion to Local Enterprise Partnerships and allow us to plan our economic future.

“The £2billion now promised represents just four per cent of that total and won’t even be available until 2015.”